Depend_on_Social_Security_or_Plan_for_Retirement

1 Depend on Social Security or Plan for Retirement ' 2 As expenses for Americans continues to grow, it is time to buckle down on planning for retirement, without depending so much on Social Security. Republicans Rep. Paul Ryan of Wisconsin, the new chairman of the House Budget Committee, states that Social Security is “going broke” and faces a $5.4 trillion deficit over the next 75 years.(Christian Science Monitoring by David R. Francis Feb 24) With this being known, many Americans are starting to worry' Many younger individuals ask “Will the money that he or she has paid into the system still be there when he or she gets older'” The answer is not likely. No matter how much a person has paid into Social Security, the politicians have put nothing aside for his or her retirement. For all of a person’s working years, 15% of what he or she earns(up to $60,600 of earnings per year)goes to the politicians as Social Security tax. One thing the politicians will not do is put that money into a personal account for you. This tax money goes to pay everyone else’s Social Security payments. Since Social Security forms the foundation for our retirement income system, providing critical benefits to millions of Americans. The time is now, to start planning for retirement. Social Security, Medicare running out of money faster than expected. A brief article in The New American posts, that Social Security and Medicare, Big Government’s two most cherished social-welfare Programs, are running out of money faster than expected, thanks to the persistent economic downturn. Medicare which is already running a deficit, will run out of money by 2017, while Social Security will be broke 20 years after that, according to new estimates released on May 12 by the Social Security board of trustees. The estimated 5.7 million jobs lost since late 2007 have meant lower revenues from payroll taxes used to fund these two misnamed “entitlement” programs, and the looming retirement of tens of millions of baby boomers will quite possibly strain them to the breaking point. Meanwhile, Medicare Social Security cost more than $1 trillion last year, of more than one-third of the entire federal budget. (The New American 8 June 2009) A person planning for retirement should take some valuable steps in preparing. The person should first eliminate consumer debt and check the savings account. Putting a little bit of each 3 paycheck into a savings account now, will help to drastically prepare him or her for the future. The amount of money it will take to meet a person’s needs is something a person needs to keep in mind, because it is generally 70 to 80% of his or her income. Health related expenses are something to also think about, because nobody can guarantee good health and health related expenses, so without enough planning, a person might have to consider working part-time after retirement. Working after retirement may not sound like a good idea, but a person might have to without having taken the time to prepare him or herself for what is to come. With the rising cost of everything in the world today, retirement will cost more than one thinks. Investments are something to think about, if a person finds a good investment, this could take a lot of worries off of his or her mind. When looking for investment opportunities, a financial planner can help to get a person in the right direction, by showing good investment strategies. Planning for retirement may sound confusing, but with the right steps taken, a person can be financially successful in his or her later years. Do not cut the budget short by spending money on unnecessary purchases today. There have been some proposals to ensure the solvency of Social Security would add individual accounts, similar to defined contribution plans(set amount of money to be withheld from pay), to the current defined benefit plan(automatic percentage deducted from pay.) By themselves however, such individual accounts cannot guarantee the system’s solvency. Individual accounts would directly link a portion of the worker’s contribution to benefits. The defined contribution structure would enable workers to earn a higher rate of return on their contributions. However, individual accounts would do nothing to help Social Security unless incremental investment, either supplemental Social Security revenues or off-set current promised benefits. This sounds like a good idea, but would probably take years to instill such a program, and at that time of insertion the deficit will have risen extremely higher. The public needs to get more involved, to help the issue of Social Security going broke. If it means that a worker should pay more in to his or her benefits or take a lesser benefit when available. Surveys of the 4 American public reveal overwhelming and broad support for the Social Security program. Support has typically been defined as willingness to endorse public spending on the program. This seems like a good idea for those who are worrying now about the future. A person is not likely to notice an extra twenty dollars going to Social Security, which an end result would give him or her more money monthly. (Cook and Barrett 1992)By that standard, Americans are firmly behind Social Security because they Overwhelmingly prefer to spend the same or more on the program. With the time to plan for retirement being upon us now, investments in 401k, government bonds, real estate, or saving money in bank accounts, is something every person should think about. The cost of healthcare is not going to suddenly lessen, home repairs will always be around, and the cost of daily living is sure to increase. With it being known that Social Security has fallen on hard economic times, saving money for the future seems like the right step to go. Unless a person is set financially for the future, and there is plenty that are not, a person should take action while he or she still can and give him or herself security for the days to come.